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Cisco convergence

Things are looking up for Cisco Systems and for those lucky CSCO stock owners nowadays as Cisco is well under way towards strong penetration of the telco market , hell they even wap enabled their website just now.

That is a strong 54% gain in the last 4 months , and even brighter forecasts with the stock now almost unanimously rated as sector outperformer , and the fact that they set to buy back 7 billion worth of their own stock does not leave too much room for doubt either.

There is not a single reason behind this but a major one is that as the line between isp and telco providers blurs and the equipment needed becomes essentially the same it is only normal that the big players in telecom like Nortel and Alcatel face greater concurrence from big network players like Cisco (if they seize the niche like they did) as the two markets eventually converge.

Now market convergence is not a new notion , network convergence is clearly a lot newer , but leave it to Aaron Rakers, an analyst with A.G. Edwards & Sons Inc. to give it a dual meaning not even he suspected. “We believe shares of Cisco will continue to perform as … the company is well positioned to continue to benefit from overall network convergence,”

Now don’t get confused just now , people like him use fuzzy and buzzword type talk , and is funny , in straight technical cisco terms “network convergence” generally is when after a topology change in the network , all the routers have seen and assimilated the change the network is said to have converged.

The much informed analyst guy must likely did not mean that Cisco’s stock will perform because their routers propagate and update to a topology changes hence causing the network to converge , while not being a stock catalyst that is clearly a condition that has to be met still … hehe.

Further more , “convergence” by itself is defined by Cisco as : “The consolidation of all communications – voice, data (Internet, ATM, Frame Relay, etc), and video (broadcast TV and video on demand) – onto a single network infrastructure. By placing all communications into digitized packets, convergence makes it easier to combine communications into new or more cost-effective applications, while helping telecommunications companies reduce capital and operational expenses.”

Now , this is the blurring i was talking about , so there is method to corporate madness after all.